To start off this blog I would like to draw your attention to the back-end of this blog, WordPress.com. WordPress is developed by Matt Mullenweg, while he was seeking a more rich environment for his blogs. As we discussed the “free” model in class, I found the next upcoming article very interesting. The Forbes article talks about the origin of WordPress and how it struggles to make money while being the industry leader. The book mentioned in class, Free by Chris Anderson, talks about the ‘freemium’ model, where free content is supported by advertisements or users that pay for specific features.

Chris Anderson states that “every industry that becomes digital eventually becomes free”. As Editor-in-Chief of Wired, he created this extensive article of his opinion, please watch the short video.

My question to you: Do you think “freemium” is a sustainable business model for the next 5-10 years?

Tags: , , , , ,

2 responses to “WordPress.com”

  1. maartjeasscheman says :

    Nothing is for free, neither setting up and maintaining a business. Products might be offered free to consumers, but just free in terms of money. I think consumers are still paying but in the form of giving away their personal data, sharing their opinions about products or allowing to receive advertisements. That way companies are benefiting from the potential value of these intangibles through selling personal data or attracting advertisers with the reach on their website. Also companies like to give away free samples to promote their product. I would say, until proof exists that online marketing through the use of personal data (like e-mail marketing) will not work and giving away free samples is not a sustainable way of marketing, “freemium” is a sustainable business model.

  2. Michael van Ommen says :

    It is my opinion that, at least for some industries, the freemium business model can be or become sustainable for the next decade. For example, take the ‘app’ industry. For any smartphone OS, there is a marketplace where you can get ‘free’ and paid applications. The free applications, apart from the occasional home-developed try-outs, generally serve advertising (for which you can usually also pay to get rid off) or require payment for more advanced features. Some app builders are currently even trying out free upgrades to premium status as a reward for downloading or rating other apps, filling in surveys, or performing some other task. If you check out the sheer number of applications existing, in any of these markets, you realize this is all done in a highly competitive market.

    If we take a look at the gaming industry, we can also see some exploration going on into the freemium concept. Many games are introduced at a price around 50 euros. The high price reduces a customers’ inclination to try out a new game that he or she is not as familiar with. Dropping this barrier (almost) completely, can possibly increase the user base dramatically. It will at the minimum serve as a boost to the amount of people that try out a game.

    One long-running example of this is a game with a massive internal economy. Eve online has a system where real money can be exchanged for virtual currency. Providing users with the choice of paying for the game with real money or simply with time played.
    This game has not only attracted the attention of economists for its business model, but also for its’ massive internal economies that closely simulate economic workings in the real world.

    Whether freemium will be a sustainable business model for all (soon to be)digitized businesses I cannot tell. But it certainly provides interesting posibilities.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: